Linking Person-Job Fit To Employees’ Retention: The Mediating Role of Work Engagement

Abstract

Retaining employees has become an important issue for the companies because retention helps the organizations to achieve their goals. This study intends to identify factors used to increase employees’ retention. Specifically, this study examines the relationship between person-job (PJ) fit, work engagement (WE), and employees' retention. The study also determines the role of WE as a plausible mediating variable between PJ fit and employees’ retention. The study was conducted among 268 engineers in semiconductor companies in Northern Region of Malaysia. The Structural Equation Modeling (SEM) was utilized and it found that PJ fit has positive inclination towards employees’ retention and WE. The study also shows WE as positively affecting employees’ retention serving as a mediator in the relationship between PJ fit and employees’ retention.

Keywords: Person-Environment FitPerson-Job FitWork EngagementEmployees’ RetentionSemiconductor Industry

Introduction

The electric and electronic (E&E) industry was claimed to be the key industry that contributed significantly towards manufacturing export, employment, and investment in Malaysia (Brandt & Chuah, 2012; MIDA, 2011). Meanwhile, the semiconductor sector was the main E&E sub-sector, which accounted for 93.4% of the total export for electronic components or 50.8% of Malaysian total electronics export for 2011 (MIDA, 2012; Brandt & Chuah, 2012). In relation to that, excessive development efforts have been made by the Malaysian Government towards Penang’s semiconductor industry, particularly dealing with the issue of low cost production from Republic of China, India, Taiwan, Vietnam, and other Asian countries (MIDA, 2011; OECD, 2011). Due to this, the Malaysian Government initiated a number of actions in attracting new business opportunities, especially on upgrading Penang’s semiconductor industry towards high value-added industries (MIDA, 2011; Bormann, Krishnan & Neuner, 2010) that required the semiconductor companies to move away from labour-intensive to more capital-intensive operations (MIDA, 2011; Bormann et al., 2010) which focus on advanced research, design, and development of new product and technology. This situation warrants a huge number of skilled employees, especially engineers who become the important person in conducting the above mentioned business activities (MIDA, 2011; Michael Page International Malaysia, 2012). However, the current issues of skilled shortages and phenomenon of migration among Malaysians (Michael Page International Malaysia, 2012; OECD, 2011; myStarjob, 2012) have disrupted the process of recruiting engineers for semiconductor companies in Penang. As claimed by Datuk Rosli Jaafar, The General Manager of the Penang Development Corporation (Chan, 2011), many skilled talents in Penang have moved away to the neighbouring country, such as Singapore that would subsequently affect the process of getting and retaining qualified engineers for semiconductor companies in Penang.

It is crucial to note that, the retention of employees may be attributed to factors which related to their work environment, in terms of match between employees and their work environment. In other words, engineers who perceive fit with their work environment may influence them to remain in the organization. In general, fit refers to a congruence or compatibility between an individual’s attributes (e.g. skills, knowledge, abilities) (Jee & Kristof-Brown, 2012) and some environmental object (e.g. organization, work group, job) (Kristof, 1996). In other words, it involves the compatibility or congruence between individual abilities with their work environment, which specifically called as Person-environment (PE) fit. According to the fit theory, PE fit consists of five main dimensions, such as vocation, organization, job, group, and supervisor (Kristof, 1996). Out of these five dimensions, Person-job (PJ) fit is the main PE fit dimension that received greatly attention from researchers (Iplik, Kilic & Yalcin, 2011) and was claimed to influence many positive human behaviors.

Edwards (1991) had made an important contribution to the PJ fit literature as he conceptualized PJ fit as having two different conceptualizations, which were PJ demands-abilities (DA) fit and PJ needs-supplies (NS) fit. The PJ DA fit was specifically defined as the congruence of employees’ KSAs with their job demand. This PJ DA fit explains that an individual should have specific KSAs that are required for a job implementation. With these KSAs, an individual will perform their job effectively. On the other hand, the PJ NS fit represents the employee’s needs, and preferences that are met by the job performed (Edwards, 1991). It explains that the job performed by an individual will fulfill the individual’s needs. However, most of PJ fit studies are concentrated on the benefits of PJ DA fit and it was extensively used to retain employees within an organization (Edwards, 1991). Low employees’ retention, which represents high employees’ turnover may weaken the business performance (Mustapha, Ahmad, Uli & Idris. 2010; Doh, Smith, Stumpf & Tymon Jr., 2011). Additionally, leaving employees also disrupt the company’s work progress, as the company needs to take extra time to find replacements for them. It is reported that Malaysia faced a relatively long time to fill the professional vacancies which takes an average of six weeks (myStarjob, 2012). Other than that, the process of finding replacements for leaving employees also involves negative financial impact to the organization which includes cost of recruiting, selecting, and training new employees.

In this paper, PJ fit was tested to influence employees’ retention. Even though it is significant to study the influence of PJ DA fit on employees’ retention, some researches have reported a moderate relationship and mixed findings on the relationship between DA fit and employees’ retention (e.g. Mohamed, 2009; Greguras & Diefendorff, 2009). According to AbuKhalifeh & Mat Som (2013), employees’ work engagement (WE), which was conceptualized as three main dimensions (vigor, dedication and absorption) was an important factor to enhance employees’ retention. Specifically, this study tested the WE as mediating variable between PJ fit and employees’ retention (refer Figure 1 ).

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The Relationship Between Variables

Methodology

Data Analysis and Results

The data measures were confirmed for normality, linearity, and homoscedasticity (Tabachnick & Fidell, 2013). Next, the initial validity using exploratory factor analysis (EFA) and reliability were used to assess the psychometric properties of all measures. All three instruments showed Cronbach alphas of 0.829 (PJ fit), 0.923 (WE) and0.694 (employees’ retention). The data analysis continued with two steps approach recommended by Anderson & Gerbing (1988). The first step involved confirmatory factor analysis (CFA) to examinethe measurement model of all variables. The standardized root mean residual (SRMR), root mean square error of approximation (RMSEA), Goodness of Fit Index (GFI), Comparative fit index (CFI) and Tucker-Lewis index (TLI), and chi-square/degree of freedom (χ2/df) were observed. The results of CFA for PJ fit showed good model fit with the p-value= 0.296 (p> 0.05), GFI= 0.993 (GFI>0.90), TLI= 0.996 (TLI>0.90), CFI= 0.998 (CFI> 0.90), RMSEA= 0.029 (RMSEA< 0.08), and SRMR= 0.011 (SRMR< 0.10). Meanwhile, the goodness of fit (p-value= 0.065 (>0.05), GFI= 0.953 (>0.90), TLI= 0.969 (>0.90), CFI= 0.978 (>0.90), RMSEA= 0.055 (<0.08), and SRMR= 0.042 (< 0.10) confirmed the significant model of WE measurement model. Lastly, employees’ retention measurement model had achieved the recommended value of fit, as it achieved the goodness fit of p-value= 0.084 (>0.05), GFI= 0.993 (>0.90), TLI= 0.965 (>0.90), CFI= 0.993 (>0.90), RMSEA= 0.074 (<0.10), and SRMR= 0.055 (<0.08). The standardized factor loadings ranged from 0.52 to 0.79 and were significant at p< 0.05. Therefore, convergent validity was established for all measures of this study.

The next step involved the process of hypotheses testing using SEM with a good overall fit to the model (CFI = 0.960 [>0.90], TLI = 0.955 [>0.90], RMSEA= 0.033 [<0.08], and SRMR = 0.052 [<0.1]). The standardized regression results presented in Table 1 found that PJ fit was positively correlated with employees’ retention (β= 0.340, t= 2.280, p<0.05). The results also confirmed the positive correlation between PJ fit and WE (β = 0.283, t= 2.647, p<0.05), and the relationship between WE and employees’ retention (β= 0.794, t=2.232, p<0.05). This result supported Hypothesis H1, H2, and H3. These three results confirmed a significant path to test for the mediation effect of WE on the relationship between PJ fit and employees’ retention.

To test the mediating effect of WE, the study utilized a fully mediated model comprises of three variables. It was found that the fully mediated model has a good model fit, as it achieved the goodness fit values of CFI= 0.960, TLI= 0.955, RMSEA= 0.033, and SRMR= 0.052. The model revealed that PJ fit had positive and significant influenced on WE (β= 0.305). PJ fit which influenced WE further influenced employees’ retention (β= 0.633). These results showed that WE mediates the relationship between PJ fit and employees’ retention. Based on these results, Hypothesis 4 was supported. Furthermore, this fitted model revealed that 35.1% of variance in employees’ retention had been significantly explained by PJ fit that was mediated by WE. Figure 2 shows simplified model for the mediating effect of WE on the relationship between PJ fit and employees’ retention.

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5. Discussion

This study discovered that there is a positive significant relationship between PJ fit and employees’ retention. Employees with adequate KSAs that are fitted with the demand of the job are highly skilled in conducting their job and they would experience less job stress but high job satisfaction while performing their job. As a result, it would motivate the employees to continue performing their job effectively and this could motivate them to stay in their organization. The study also confirmed the positive and significant relationship between PJ fit and WE. This means that engineers in semiconductor companies with high KSAs (PJ fit) are highly engaged in their job. This is because engineers with high KSAs that meet their job demands know their job better. They could apply their KSAs that meet their task implementation. In this situation, they could conduct their job effectively and efficiently, which ultimately motivated them to be engaged in their work. The results of the study also indicated a positive and significant relationship between WE and employees’ retention. These findings suggested that engineers in the semiconductor companies who were engaged in their job were likely to remain within their current organization. Research finding also revealed that WE served as mediating variable on the relationship between PJ fit and employees’ retention. In this study, the engineers who had at least a Bachelor degree in any engineering discipline and had gone through formal education related to their job position as an engineer. With specific KSAs (gaining from formal education) that met their job’s demands, it would help the engineers to implement their job effectively and successfully, which in turn motivated them to engage in their job implementation. They would also be positively rated and promoted with respect to their performance evaluation, and these would influence them to stay longer, thus increase employees’ retention. Hence, this indicates that engineers with specific KSAs (gained during their studies) that match their job’s (PJ fit) demand would be engaged in their work, and this would influence them to stay in the organization.

6. Conclusion

Based on the research findings and discussions of the results, it is proven that PJ fit is important predictor that influenced employees’ WE and this would motivate them to remain in their organization. Related organization can use this given findings to develop comprehensive strategies to enhance employees’ retention. For example, an effective training and development program should be conducted in a way to enhance the employees’ KSAs and WE that subsequently promotes the employees’ retention. Furthermore, the findings were also significant towards the recruitment process in the organization. Organization should select candidates who have specific KSAs that fit well to their job demands (PJ fit) and who are highly engaged in their work in order to have loyal employees. Future study recommended to conduct using different concept of fit, either with regard to supplementary fit or needs-supplies fit. In addition, future researches could also be conducted by combining different concepts in a single study. By doing so, future studies could provide a comparison between demands-abilities fit, needs-supplies fit, and supplementary fit. Other than that, it is suggested that future studies should apply other measurements of fit, i.e. objective fit or perceived fit in collecting fit data.

Acknowledgements

I thank to Universiti Utara Malaysia, specifically Othman Yeop Abdullah (OYA) Graduate School of Business, and Research and Innovation Management Centre (RIMC) for the research grant.

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